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Gold/Mining/Energy : Canadian Diamond Play Cafi -- Ignore unavailable to you. Want to Upgrade?

To: Chas. who wrote (4760)	11/21/2006 6:42:22 PM
From: Natedog	Respond to of 16206

Here read this! It will help fuel your fires! Development of a new diamond mine equivalent to the current yearly output of Botswana would be needed to balance the gap expected by 2010 in diamond supply and demand. Addressing the 2006 World Diamond Conference, in Perth, on Monday, James Allan, principal of Johannesburg-based corporate finance and advisory firm James Allan & Associates said current global mine production was estimated at $11,3-billion by 2010. Of that, Botswana, with 25%, and Canada and South Africa, each with 15% to 16% of world output, would dominate production. “Demand growth for diamonds over the next five years will be equivalent in value to between $4-billion and $5-billion,” Allan said. “However, the diamond supply shortfall worth in value around $3-billion will start kicking in by 2008 and be fully evident by 2010.” The immediate impact of this would be upward pressure on rough diamond prices, he told the conference, adding that it would, however, not be felt during 2006 and 2007. It would start rising after 2007 to balance the market shortfalls between 2008 and 2010. “These rises will be in addition to the 35% rough diamond price rise evident since 2002. So the net impact is a production/demand deficit that will be exacerbated by declining South African production, reductions in diamond exploration spends and short-sighted efforts by some producers to focus on near-term mine development pipelines,” Allan said. He also warned that luxury goods continued to outstrip the performance of diamond sales as the advertising campaigns of both sectors remained poles apart in budget and top-of-mind recall. “Despite global advertising spends on diamonds annually of $750-million and $800-million, this represents just over 1% of advertising expenditure on a diamond sales ratio basis,” Allan said. “As impressive as this appears, it lags well behind luxury good advertising spends which now account for an equivalent of between 12% and 15% of total sales,” he said. Over half of the yearly global diamond sales went to the US retail sector, with more than half of that amount occurring between the short period of Thanksgiving in November and Christmas Day a month later. - Kevin Skinner